Nokia quotes higher phone prices in Q1

Nokia hinted at some positive news for next week's first quarter earnings report, saying that the average sale price for its handsets was 103 euros ($124.80) over the first three months of the year, 4 euros ($4.84) higher than expected.

That average price is the highest Nokia's has been in three consecutive quarters as average handset prices across the industry have continued to fall as volumes shift from the developed world to the developing. Coupled with Nokia's recent 2006 projections for nearly a 15% increase in global phone shipments across the industry, the news couldn't come at a better time for Nokia's languishing stock price. As the world's top handset-maker, Nokia is now expecting increasing shipments as well as increased revenue off of each shipment. Shares of Nokia jumped more than $21 on Tuesday, the stock's highest point in two years.

Nokia, however, added one caveat. It said the higher average sale price came from capturing a lower-than-expected proportion of the low-end handset market. While Nokia's best margins come from its higher-end phones, the market is rapidly shifting toward the low-end as regions like south and east Asia lead the next rounds of growth in wireless. If Nokia is having trouble selling into those markets, it could find its lofty 33% market lead eroding.